SANTA MONICA HOSPITAL v. ELI (1985)

NATURE OF CASE:

Petition by employer for writ of mandate after trial court overruled demurrer to employee's complaint alleging wrongful discharge.   We grant the petition and direct that the writ issue.

BACKGROUND:

Employee's action in the superior court seeks to proceed on two bases:  (1) breach of oral contract of employment and (2) intentional infliction of emotional distress.   Defendant hospital demurred to employee's complaint on the grounds that the action is predicated upon an oral contract and therefore barred by the statute of frauds.  (Civ.Code, § 1624, subd. (1);  Munoz v. Kaiser Steel Corp. (1984) 156 Cal.App.3d 965, 203 Cal.Rptr. 345;  Newfield v. Insurance Co. of the West (1984) 156 Cal.App.3d 440, 203 Cal.Rptr. 9.)

FACTS PLEADED:

We assume as true all of the factual allegations of plaintiff's complaint.   Basically they are:  plaintiff was employed by hospital on June 9, 1979 and worked continuously since then until discharged.   In 1980 she became a supervisor of a department.   In July 1983 during an investigation by hospital concerning drug use by hospital employees, she was questioned about her use of drugs and her knowledge of drug use by employees in her department.   She was discharged on the grounds that she had failed to adequately supervise the employees in her department.   Plaintiff was given no opportunity to defend herself nor was she advised of any grievance procedure available to her.   She had at all times performed her work satisfactorily and prior to being discharged had not received any disciplinary warnings from her employer.

In addition to these basic facts, plaintiff alleges in her cause of action for breach of oral contract the following:  “Defendant's actions discharging the plaintiff violated the implied terms of the oral contract, providing that plaintiff would not be discharged without cause and without compliance with written and/or oral warnings prior to discharge and violated the implied covenant of good faith and fair dealing.”

In pleading her second cause of action a “claim for relief for intentional infliction of emotional distress” plaintiff adds:

“Defendant's actions in interrogating the plaintiff about drug use, refusing to provide her an opportunity to defend herself or present her side of the story, publicly escorting her from the building, failing to follow warning or other grievance procedures, and in singling out the plaintiff for suspension and discharge, were done maliciously and for the purpose of causing plaintiff to suffer humiliation, mental anguish, and emotional and physical distress, and were done with the knowledge that plaintiff would thereby suffer emotional and physical distress.”

DISCUSSION:

(1) Appropriateness of Review

 Ordinarily a reviewing court will not interfere with a trial court's ruling on pleadings.   Nonetheless, where as here there are similar cases pending,¹ and the consideration of the instant case will avoid unnecessary further procedures therein as well as prevent useless litigation in other similar situations, review by this court is proper.  (Babb v. Superior Court (1971) 3 Cal.3d 841, 851, 92 Cal.Rptr. 179, 479 P.2d 379;  City of Los Angeles v. Superior Court (1977) 73 Cal.App.3d 509, 511, 142 Cal.Rptr. 292.)

(2) Applicability of the Statute of Frauds

California Civil Code section 1624 in pertinent part reads:  “The following contracts are invalid, unless the same, or some note or memorandum thereof, is in writing and subscribed by the party to be charged or by his agent:  (1) An agreement that by its terms is not to be performed within a year from the making thereof;  ․”

 In Newfield v. Insurance Co. of the West, supra, 156 Cal.App.3d 440, 203 Cal.Rptr. 9, we explained that an action such as the present is barred by the statute of frauds.   The statute renders unenforceable any oral contract, including one of employment, which is not to be performed within one year.   Examined in the light of our discussion in Newfield the pleadings at bench disclose that employee-plaintiff's cause of action for a breach of oral contract is precisely the type of action which is barred by the statute for the reasons explained in Newfield.   Employee-plaintiff nonetheless categorically contends that Newfield is not at all applicable to bar her complaint in its present form;  and even if it were, appellant further contends that it would be an abuse of discretion to sustain defendant's demurrer at least without leave to amend because of additional features here but not present in Newfield.

 The first of these alleged additional facts is the existence of a written policy memorandum of the employer concerning warnings to employees.   Plaintiff contends this provides a “memorandum or writing” within the meaning of the first sentence of Civil Code section 1624.   Plaintiff argues that she can amend her complaint to allege such a writing and that her termination was in “violation of written policies and procedures” of defendant-employer.   Although not a part of the original employee's complaint, plaintiff's counsel has provided this court with a copy of employer's policy memorandum (“Policy No. 662”) referred to.   We accept it as evidence of that which employee could allege.   The essence of that writing is quoted by plaintiff in her brief in opposition to the petition.   It states:  “Whenever practical employees are warned of actions which, if continued or repeated would result in disciplinary action (including discharge).”   We have examined the entire memorandum and conclude that this is not the kind of memorandum or writing sufficient to remove the present oral contract from the operation and effect of the statute rendering such contract statutorily invalid.

Defendant-employer at some time adopted this internal policy.   Plaintiff does not say when the policy was adopted.   It is not ascertainable from the memorandum itself.   Plaintiff does not contend that she could or would amend her complaint to say she was told of the policy before, during or even ever after the initial hiring.   She does not say she could allege that she ever discussed it with employer's representatives during her employment and before her termination, or that she ever relied upon it.   Plaintiff does not say that she could allege this was a memorial of the particular oral contract which she entered into or a part thereof.   Nothing in plaintiff's argument or totality of pleadings demonstrates that she truthfully could so allege.   It does not truly appear to be a memorandum of any part of the statements constituting the oral hiring agreement.   This is true whether the allegation be that the oral contract of hiring was made all at the time of the initial hiring or even if over a course of time.

The written “Policy No. 662” does not state or provide for any kind of grievance, protest or other administrative procedure available to employees.   Nor does it state, imply or otherwise establish any prohibition or limitation by employer upon its now codified common law right to terminate a non-specified-term employee at will.   Nor does it require or establish any necessary procedural requirements in the dismissal of any employee.   At most the writing appears to be an internal memorandum concerning how, whenever practical, employees should be warned.   This appears to be merely a unilateral (albeit a probably wise) policy decision by employer as to how its supervisory personnel should ordinarily handle warnings to employees.

Moreover, plaintiffs argument raises the issue of the applicability of the policy to her, as a non-specified term employee.   The memorandum covers warnings to employees about performance matters which would be causes for dismissal.   Plaintiff argues:  the policy memorandum exists.   She then without more makes the conclusion that because a policy exists she therefore becomes an employee who cannot be dismissed without cause.   The conclusion is non sequitur.   Since the policy relates to cause, not following it does not prevent the employer from dismissing an employee for whom cause is not required.   An unspecified term of employment needs no cause for termination.   It is terminable at the will of either party.  (Lab.Code, § 2922.)

Moreover, the memorandum is not one of the specific oral contract between employer and this particular employee, the plaintiff here.   It is a memorandum about an internal unilateral decision, not about a meeting of the minds.   It is not alleged or argued that it ever was addressed to employees as a specific term or part of or in addition to their contracts of employment with employer.

That is not to say that the policies and rules adopted by an employer from time to time even after initial hiring cannot be considered parts of the employment agreement.   Nor do we reject the idea that a memorandum or writing need not be addressed directly to the employee rather than to employees at large or some third person.   We simply observe that the written document referred to by plaintiff here is not a part of a particular oral contract with this employee.   Nor is it the kind of instrument explicitly agreeing with all employees that none will be dismissed except for reasons and by procedures particularly set forth therein.   It does not serve as an adequate memorandum or writing of the agreed terms of employment.

No authority is cited for the extent to which plaintiff argues the meaning of “memorandum or writing thereof”, as contained in Civil Code section 1624, subdivision (1), should be interpreted.   Allowing amendment to incorporate this hospital's memorandum would add nothing which could breathe life into plaintiff's attempted first cause of action.

As in Newfield we refuse to engage in semantic game playing.   Plaintiff here attempts to evade the statute of frauds by arguing this oral contract of employment is not one which “absolutely cannot” be performed within one year.   Although this legalism has been repeatedly used, especially to help an employee in egregious cases (White Lighting Co. v. Wolfson (1968) 68 Cal.2d 336, 66 Cal.Rptr. 697, 438 P.2d 345;  Plumlee v. Poag (1984) 150 Cal.App.3d 541, 198 Cal.Rptr. 66), it is still legalistic gymnastics which probably in most cases bears no resemblance to the realities or expectations of the parties therein.   It would be especially so here.   If the argument were accepted it would be a sham.   Read without semantic artificiality but with honesty and liberality and in plaintiff's favor, her complaint shows:  she was employed with at least a hope of long-time employment and with possible implication that it would be for more than one year;  that she would be a permanent employee as long as satisfactory;  she was a satisfactory employee for at least four years.

Thus shorn of semantic fiction, from what can be gleaned from the complaint, both parties probably expected continual employment, not an employment that “could have been” performed within one year.   Hospitals and their departments do not operate for only a year or less.   Economics and good employment practices dictate that employers of this kind seek and envision long time, permanent, loyal employees.

There is much sympathy for an honest and faithful employee in today's economic system.   Accordingly, exceptions have been made in certain cases.  (Cleary v. American Airlines, Inc. (1980) 111 Cal.App.3d 443, 168 Cal.Rptr. 722.)   We recognized them in Newfield.   Accordingly, such contracts of employment as at bench could well be deemed to be intended for at least if not more than one year.   That would make the employee one for the “specified term” of at least one year—plus continuance as long as satisfactory.   Her dismissal would then require cause under Labor Code section 2924.   This construction is more reasonable because it is more realistic.   Also it would benefit employee as far as Labor Code section 2922 is concerned.   Nonetheless, the statute of frauds (Civ.Code, § 1624, subd. (1)) has to be met and honestly answered.   The very purpose of the statute is to prevent injustice, frauds and unfounded claims of particular promises which may be difficult to defend.  (Munoz v. Kaiser Steel Corp., supra, 156 Cal.App.3d 965, 203 Cal.Rptr. 345.)

(3) Applicability of Labor Code Section 2922

 Labor Code section 2922 reads:  “An employment, having no specified term, may be terminated at the will of either party on notice to the other.   Employment for a specified term means an employment for a period greater than one month.”   The law thus expressed has not yet been altered so as to deprive the employer of the historic common law right to remove an employee where no length of employment is specified or specifically promised.   We recognize exceptions have been made in cases where other considerations such as longevity, reliance on employer's conduct or representations implied therefrom, or contributions toward retirement or other facts raising an estoppel exist.   Cleary, supra, is one such case.   There, the features of longevity, employer benefit plans and other representations distinguish it from the case at bench.

We are not blind to or unaware of the reasonableness and equitable appeal of plaintiff's true posture and her cause—that of reasonable expectation of some permanence.   She in fact has served more than what might well be her apprenticeship or learning probation.   After four years fairness indicates that there should be a cause for dismissal.   But plaintiff's complaint discloses she was not employed for a specified term—whether of one month or longer—within the meaning of Labor Code section 2922.   Any further exceptions to or limits, if necessary on an employer's right to hire and dismiss, should be made by the Legislature.

(4) Estoppel to Assert the Statute of Frauds

 Plaintiff argues that leave to amend should be granted because she can allege facts which show an estoppel.   She does not state what those facts are.   She simply concludes “Specifically, plaintiff should be given leave to demonstrate that she would suffer unconscionable injury if she were injured [sic] ² and to demonstrate that she has fully performed all terms and conditions on her part to be performed under the employment contract.”

This allegation is so devoid of any real statement of fact which she would allege and which if true would clearly show an unconscionable injury—or shocking act by employer—that it hardly needs discussion.   This is a totally worthless conclusion.   Mere dismissal is not unconscionable.   Hardship of seeking other work and even not finding other employment is not an unconscionable or shocking injury.   Nothing which plaintiff has alleged or claims she could allege approaches the kind of situations described and discussed in Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330;  or Munoz v. Kaiser Steel Corp., supra, 156 Cal.App.3d 965, 203 Cal.Rptr. 345, as establishing a cause of action for wrongful discharge on the basis of estoppel, to plead the statute of frauds or upon the claimed tort of intentional infliction of emotional distress which we next discuss.

(5) Intentional Infliction of Emotional Distress

The second cause of action of plaintiff's complaint is for intentional infliction of emotional distress.   As plaintiff indicates, this issue was not addressed in Newfield.   Nonetheless, this added cause of action is but artful pleading and an effort to circumvent the effect of the operation of Civil Code section 1624, subdivision (1) and Labor Code section 2922 barring this type of action as interpreted in Munoz v. Kaiser Steel Corp., supra, 156 Cal.App.3d 965, 203 Cal.Rptr. 345 and Newfield v. Insurance Co. of the West, supra, 156 Cal.App.3d 440, 203 Cal.Rptr. 9.

 In truth this allegation without more cannot be made as one of fact.   It is but a conclusion of law.   Conclusions of law must be disregarded in testing the sufficiency of the complaint.  (Droz v. Pacific National Ins. Co. (1982) 138 Cal.App.3d 181, 188 Cal.Rptr. 10;  Timperley v. Chase Collection Service (1969) 272 Cal.App.2d 697, 77 Cal.Rptr. 782.)   Here the pleaded facts which we accept are that plaintiff was questioned, she was not told of any procedures for protesting, (she does not allege the existence of any protest procedures) nor offered any opportunity to defend herself and escorted from the employer's building.

But these bare facts which we accept as true do not, when added to the other pleadings, demonstrate grossly unfair or outrageous conduct, malice nor any intent to inflict emotional distress.   If so, nearly every dismissal would be accompanied by an automatic creation of a cause of action for such.   Even if we accept the “policy” statement of employer as part of the employee's contract and assume for argument here the added allegation that employer failed to follow its own warning policies, that failure is not a violation of a public policy.   That fact does not demonstrate conduct which elevates the mere dismissal even if done on the basis of a mistake, to the tort of intentional infliction of emotional distress.

 The elements of a prima facie case on intentional infliction of emotional distress are:  (1) extreme and outrageous conduct by the defendant with intention of causing or the reckless disregard of the probability of causing emotional distress;  (2) the plaintiff suffering extreme or severe emotional distress;  (3) actual and proximate causation of the emotional distress by the defendant's outrageous conduct;  (4) that the defendant's conduct was unprivileged;  (5) abuse of employer's superior position over employee.  (Tameny v. Atlantic Richfield Co., supra, 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330;  Cervantez v. J.C. Penney Co. (1979) 24 Cal.3d 579, 156 Cal.Rptr. 198, 595 P.2d 975;  Loehr v. Ventura County Community College Dist. (1983) 147 Cal.App.3d 1071, 195 Cal.Rptr. 576;  Kelly v. General Telephone Co. (1982) 136 Cal.App.3d 278, 287, 186 Cal.Rptr. 184;  Buscemi v. McDonnell Douglas Corp. (9th Cir.1984) 736 F.2d 1348.)   At bench plaintiff has pleaded at most an investigation by the hospital from which it concluded that plaintiff was not properly performing her duties and responsibilities of supervising the employees in her department.   By plaintiff's own allegations, this inquiry concerned a serious matter, that of drug abuse by employees.   It may be that employer was mistaken or that employer should have engaged in further inquiry to ascertain more accurately employee's responsibility.   Nonetheless, nothing that is alleged, or that plaintiff contends she would allege, shows facts which demonstrate extreme and outrageous conduct by the defendant with the intention of causing, or a complete and reckless disregard of the probability that it would cause, emotional distress.

Common sense ideas of fair play and consideration of the social and economic realities and hardships which employees face even when they want to be good and loyal employees and recognizing also the disparate bargaining position of the parties dictate that both employee and employer owe each other the duty of dealing fairly and honestly with each other.   Applied here those duties would require employer to make an honest and careful inquiry of the problem that precipitated this dismissal.   There is no allegation of any fact which shows a failure to so inquire or shows abusive treatment or total disregard of the employees.   Even assuming that employer was mistaken in its conclusion as to the degree of responsibility of plaintiff-employee, still it made an investigation and based on that, rather than on any legally prohibited basis, dismissed the employee.   Plaintiff-employee's dismissal implies that in employer's judgment she had an incapacity to perform her duty.   Even if plaintiff were a specified-term employee, the employer had cause for dismissal.  (Lab.Code, § 2924.)

Within the terms of its express contract and within the bounds of the fairness which is implied in any contract of employment, an employer should be allowed the right of making judgment decisions as to the need to change employees so long as it honestly and reasonably tries to get to the facts upon which it decides.   In the absence of a clear breach of contract or a commission of tort based upon total disregard of the duties of fair dealing, an employer's decision should not be second guessed by the court, based on the court's personal sympathies or ideas of personnel management.

The record discloses that plaintiff originally filed a federal action based on racial discrimination as well as the two causes of action here discussed.   In the stipulation resulting in the dismissal of the racial discrimination action and the transfer to the state Superior Court plaintiff was free to amend her complaint.   She elected not to do so.   Therefore, we assume that plaintiff has pleaded all of the true and essential facts.   As indicated, these demonstrate no intentional violation of public policy, no fraud, oppression, malice or intentional infliction of unconscionable injury.   No useful purpose would be served by permitting an amendment to pleadings merely to recite these conclusions in some other artful but nonetheless conclusionary form which the mind of imaginative counsel can devise.

Let a writ issue commanding the superior court to vacate its order overruling petitioner's demurrer and to make and enter a new and different order sustaining petitioner's demurrer to the complaint herein without leave to amend.

FOOTNOTES

1.   The instant case is one of several consolidated cases involving other employers and employees and also involving the claim of wrongful discharge.

2.   We assume plaintiff intended to say “dismissed” or “discharged.”

BEACH, Associate Justice.

ROTH, P.J., and GATES, J., concur.